Rory Stewart: Let me begin by paying tribute to the high quality of debate today from hon. and right hon. Members on all sides of the House. This has been a serious business. The consultation on the issue began in 2012 and the detailed measures we are debating today were announced in the Budget in autumn 2015. There are disagreements on every side of the House, which are expressed in new clauses 1 and 2, but, more generally, I hope that everybody in the House will recognise that the Bill has been adapted as we have listened a great deal to suggestions made by the Opposition and others. I pay tribute to the hon. and right hon. Members on all sides who pushed for the changes we have introduced on vulnerable road users, on the new role of the consultation with the Chief Justice and on definitions, particularly in respect of whiplash. I also pay tribute to what happened in the other House, where this legislation was considerably revised and improved by efforts from Cross-Bench peers, as well as Labour, Lib Dem and Conservative peers.
It is a tribute to all the work done in the other place and here that, now, having had dozens of amendments in Committee, we are down to debating two new clauses. I wish briefly to express why it is that, although we acknowledge and recognise some of the powerful arguments made by the hon. Members for Ashfield (Gloria De Piero), for Hammersmith (Andy Slaughter), for High Peak (Ruth George) and, particularly in relation to new clause 2, for Enfield, Southgate (Bambos Charalambous), the Government are proposing that the new clauses should be dropped and that we should proceed with the Bill as drafted.
There are effectively five problems with new clause 1 that lead us to feel that we should not proceed with it. The first is that it would go against the entire policy intent of the Bill. What would happen if, instead of increasing the maximum limit under the small claims track to £5,000, it were held at £1,500? The tripartite policy move has attempted to tackle three things simultaneously: to reduce the incentives for fraudulent or exaggerated claims posed by the pay-outs; to remove some of the compensation that can be achieved by getting one’s legal fees covered by the defendant; and to remove some of the current requirements on medical consultation. Those three things need to go together. If we were, for example, to increase the tariffs in line with the proposals that are dealt with by some of the amendments the Opposition have tabled for consideration later, but to leave the small claims limit as it was, we would end up in an unequal system. As my hon. Friends the Members for Croydon South (Chris Philp), for Hitchin and Harpenden (Bim Afolami) and for Middlesbrough South and East Cleveland (Mr Clarke)  have said, there are significant costs to consumers, premium payers and the social system of proceeding with a situation in which some people—not all—are encouraged to make exaggerated and, in some cases, fraudulent claims.
The Government’s position is clear: we have enormous respect for the work of personal injury lawyers, who play an honourable and important part in society in representing the interests of victims as a whole, and in no way should this Bill be read as suggesting anything other than our respect for those individuals and the work that they do. However, we argue that the purpose of the small claims court is best dealt with through focusing on the nature of the claim, not on inflation. Many of the arguments that have been made, for example by the hon. Member for Lewisham West and Penge (Ellie Reeves) and others, have focused on the question of inflation. Indeed, the entirety of new clause 1 attempts to set up a system where we look at inflation over the intervening period and determine purely on that basis whether the limit should be raised. However, as the hon. Member for Hammersmith pointed out, our theory is different—it is respected by the practice of the European courts and other jurisdictions: the basic determinant of what goes into the small claims track is not inflation but the complexity of the claim.

Rory Stewart: My hon. Friend makes a powerful point, which should, to some extent, reassure the hon. Member for High Peak, some of whose arguments rested on damage in the workplace. The rise to £5,000 does not relate to damage in the workplace. As has been pointed out, it relates only to whiplash injuries suffered in a vehicle.

Rory Stewart: Clearly two different cases are being made here. On the question of the online portal, a very serious group of people, which includes insurance lawyers, is testing it. One of the concessions that was made in the House of Lords—I think it is a good one—is to extend the time before this is rolled out by 12 months so that we have more time to make sure that the testing is done and that the portal operates properly. That is a good challenge.
The point about injuries in the workplace is that that, I am afraid, is outside the scope of the Bill, which is very narrowly defined to deal with whiplash injuries. Indeed, new clause 1 is also very narrowly defined as it deals with only the question of a “relevant injury”, which, in this case, is a whiplash injury. Therefore, while arguments about other forms of injury and employment are very interesting, they are not relevant to the debate on new clauses 1 or 2.
Moving on to the next question about simplicity and inflation, I just wish to point out that the previous Labour Government accepted the principle that inflation was not the only determinant of the levels that the small claims court should meet, because, of course, the small claims limit was raised from £1,000 in 1991 to £3,000 in 1996, and then to £5,000 in 1999 under the Labour Government before it was raised to £10,000 in 2013. Quite clearly those raises were well in advance of inflation and were driven, as indeed was the case for European small claims, by the notion of the simplicity of claims, not a change in either the CPI or the RPI.
Even if one were to accept that there should be a relationship to inflation, the mechanism proposed in new clause 1 seems to be a recipe for falling behind inflation. In effect, the proposal is that an increase should only take place if there had been a rise of at least £500, and should then be limited to £500. It would not take many years of slightly higher inflation than we have now to end up in a situation where, over a five and 10-year period, the increase would be considerably in excess of £1,000, which would then allow for a rise, but we would then find a syncopated system that, very rapidly, would be falling behind inflation.
The more fundamental point is a constitutional one. This is not an issue that is traditionally dealt with through primary legislation, and it is not an issue that is  dealt with in the Bill. That is because increases to the small claims limit are properly an issue for the Civil Procedure Rules Committee, on which the Master of the Rolls, district judges, senior judges, personal injury lawyers—barristers and solicitors, including the chair of the Association of Personal Injury Lawyers—and representatives for consumer bodies such as Which? sit. That is a better way of looking at the proper limits than trying take forward primary legislation on the Floor of the House. Technically, there is also another issue with the new clause, which is that subsection (4) should include paragraphs (a), (b) and (c).
That brings me to new clause 2. The hon. Member for Enfield, Southgate (Bambos Charalambous) quite rightly drew our attention to potentially vulnerable litigants, such as infants, children and other protected parties. He argues—on this we absolutely agree—that they suffer the same forms of injuries as any other human, and are entitled to fair compensation and the same degree of representation that would be afforded to any adult. At the moment, that is, of course, provided by the allocation of a litigation partner by the judge concerned.
The hon. Gentleman and the hon. Member for Ashfield asked what happens if that does not work and whether an increase in the number of cases would undermine that system. We have looked at this carefully, because the hon. Gentleman raised the matter in Committee. Our conclusion, having consulted a wide range of individuals, is that we do not believe that that would occur, but a number of safeguards are in place in the worst-case scenario. In most cases, an individual who is in that situation, such as an infant, would be represented by their parents. In a situation in which they were suing their parents, because the parents were, for example, driving the car, a litigation friend would be appointed by the court. In the case that they would be unable to find a competent adult who met all the criteria stated by the hon. Gentleman, including there not being a conflict of interest from that individual, it would be possible to appoint the official solicitor. In a case in which that, too, failed, judicial discretion remains to move the case of the infant out of the small claims track into the fast track, where the legal costs would be recoverable. Of course, judges would still have a very serious role to play in approving any settlement made to an infant or any protected party. That was why Lord Justice Patten made this ruling in the case of Dockerill v. Tullet:
“I can see no reason in principle why a small damages claim made by an infant should be taken out of the small claims track merely because of the age of the claimant. It is also clear that the premise on which CPR 45.7 operates is that the normal track for damages by infants will be the small claims track.”
That brings me to my conclusion. This very impressive piece of legislation has involved the upper House, the Opposition and civil society members throughout its Committee stages. The Government have made a number of very serious concessions to make the process more workable. I pay particular tribute to the Justice Committee for the pressure that it has put on us in relation to a very large number of issues, ranging from the online portal to paid McKenzie friends and vulnerable road users. We have now ended up with a Bill that does not do everything that was set out when the Lord Chancellor initially announced it in autumn 2015. Instead, with a series of realistic, focused and pragmatic compromises, we have struck the right balance between the protection of genuine  claimants who have suffered genuine injuries, and the protection of different forms of public interest—in particular, the public interest of people, especially in rural areas, who need to be able to afford their motor insurance in order to move around. This Bill will remove unnecessary complexity, unnecessary costs and, in particular, the moral damage and hazard that currently exist in the form of claims management companies and a few unscrupulous individuals.
As Lord Brown of Eaton-under-Heywood—the previous president of the Supreme Court—pointed out in the upper House, this country is now known throughout the world as a haven for unnecessary whiplash claims. Despite a significant reduction in the number of car accidents and an increase in vehicle safety measures over the past 15 years, if not over the last three, we have seen a significant increase in the number of whiplash claims, which can be accounted for only on the basis of fraudulent and exaggerated claims.
Question put, That the clause be read a Second time.
The House divided:
Ayes 240, Noes 287.